The Issue The issue at the hearing was whether Petitioner is entitled to a premium refund of her health insurance premium.
Findings Of Fact The Petitioner, Mildred Daw, is a retired State employee. She is enrolled in the State of Florida, State Employees Group Health Self Insurance Plan (the Plan). Prior to retiring, Petitioner amended her coverage in the Plan, changing from single coverage to family coverage. Petitioner modified her coverage so that her husband would be covered under the Plan. Petitioner's husband was under age 65 and qualified for Medicare Parts A and B. Petitioner was not qualified for Medicare coverage. The premium for family coverage was $178.44 per month. Petitioner began paying this amount shortly before she retired in December 1984. By letter dated, July 8, 1985, the Division of State Employees' Insurance notified retirees that: If you are under age 65 and eligible for Medicare Part A and B because of disability, you may now be eligible for Medicare Coordination coverage at the reduced rate. Please notify our office if you are eligible and send a copy of your Medicare card. Your premium will be reduced the month following our receipt of your notice and the copy of your Medicare card. The letter was sent to retirees and made no mention of surviving spouses or that a current spouse, who fit within the Medicare category, could qualify the insured for Medicare Coordination coverage. The Medicare Coordination coverage is the only program that the State offers in which it is the spouse of the insured/retiree who can qualify the insured for new benefits or different coverage. In this case, the different coverage or new benefit was solely a reduction in premium. Otherwise, the benefits under the family coverage and the Medicare Coordination coverage were the same. An ordinary person reading the letter would not have been placed on notice and would not have assumed that anyone other than the retiree was covered by the letter. If Petitioner had immediately elected the Medicare Coordination coverage, her premium would have been reduced by $42.76 a month, beginning with the August 1985, payment. The July 8, 1985, letter was mailed by first class mail to all retired State employees in the Plan. The business practice of the Division is to mail any such letters to the address of the retiree listed with the Division of Retirement and given to the Division of State Employees' Insurance or to the most current address the Division of Employees Insurance has for that particular retiree. In this case, the address which the Division of Retirement would have had on Petitioner in 1985 was her old address in Jacksonville. However, by July 1985, Petitioner had mailed the Division of State Employees' Insurance a change of address card with her new Pensacola address. She did not mail the Division of Retirement a change of address. There is no evidence as to which address the Respondent mailed the July 8, 1985, letter. Without such evidence Respondent is not entitled to a presumption of proper notice when a letter is mailed to a party with the correct address. Petitioner does not remember receiving the July 8, 1985, letter. She would have elected the Medicare Coordination coverage had she been aware of its availability. Petitioner became aware of her eligibility for reduced premiums in October 1987, when she received an informational bulletin from the Division of State Employees' Insurance. The bulletin stated the premium rates for various types of insurance coverage, including the reduced premiums for family coverage with members of the family who are qualified for Medicare benefits. Petitioner telephoned the Division and was instructed by Division personnel to send in a copy of her husband's Medicare card in order to establish her eligibility for the reduced premium. Petitioner sent a copy of her husband's Medicare card to the Division in October 1987. On November 6, 1987, Petitioner requested a refund of excess insurance premiums paid from July 1985, through November 1987. On December 28, 1987, Petitioner was informed by the Respondent that the earliest date a change in coverage could become effective was October 1987, because Petitioner had not applied for a change of coverage prior to that time. Petitioner was awarded an excess premium refund for the premium paid for November coverage. The Rules governing the Plan are found in Chapter 22I-1, Florida Administrative Code. This Chapter generally requires that an employee or retiree perform an affirmative act, by completing an informational form and sending it to the Department, before any change in coverage can be effectuated. The reason for such a requirement is that the Department has no way of knowing the number of eligible employees or retirees, without being supplied that information from the insureds, so that the Plan's administrator can better manage the Plan's funds to provide an adequate amount for the payment of claims. However, competing with this Rule is the Respondent's policy that a retiree who is otherwise eligible for certain benefits, but did not receive any notice of such eligibility is entitled to retroactive benefits. This policy is based on the Division's duty to administer the State's health plan, including notifying retirees of the availability of new types of coverage or benefits. The evidence showed that this policy takes precedence over the Rule when the Division has failed to notify an eligible retiree. In this case the Division failed to notify Petitioner of her eligibility for Medicare Coordination coverage due to her spouse's qualifications. Petitioner is therefore entitled to retroactive benefits beginning July 1985. Since the benefit of the Medicare Coordination coverage is a reduced premium, Petitioner is entitled to a refund of the excess premium of $42.76 a month from July 1985, through October 1987. The refund for that time period totals $1,154.52.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Administration enter a Final Order refunding to Petitioner excess premiums paid to the Department in the amount of $1,154.52. DONE and ENTERED this 18th day of July, 1989, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 18th day of July, 1989. APPENDIX TO RECOMMENDED ORDER CASE NO. 89-301 The facts contained in paragraphs a, b, c, d, e, f, g, h, i, j and k of Petitioner's Proposed Findings of Fact are adopted in substance, in so far as material. The facts contained in paragraphs l, m, and n of Petitioner's Proposed Findings of Facts are subordinate. The facts contained in paragraph p of Petitioner's Proposed Findings of Facts were not shown by the evidence. The facts contained in paragraph o of Petitioner's Proposed Findings of Fact are rejected. The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 8, 9, 10, 11 and 12 of Respondent's Proposed Findings of Fact are adopted in substance, in so far as material. The facts contained in paragraphs 13 and 14 of Respondent's Proposed Findings of Fact are subordinate. The facts contained in paragraph 7 of Respondent's Proposed Findings of Fact were not shown by the evidence except for the fact relating to the letter being mailed first class mail. COPIES FURNISHED: Karren Lessard 15 West La Rua Street Pensacola, Florida 32521 Larry D. Scott Senior Attorney Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Andrew McMullian III Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Augustus D. Aikens, Jr. General Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
The Issue Whether Petitioner's claim against her state group health insurance company for services related to a Magnetic Resonance Imaging examination (MRI) should be granted or denied.
Findings Of Fact At all times material hereto, Petitioner was employed by the State of Florida and was a participant in the State of Florida group health insurance plan, which is a self-insured plan administered by the State of Florida in conjunction with the plan's third party administrator, Blue Cross Blue Shield of Florida (BCBSF). This plan is frequently referred to as the PPO Plan, an acronym for preferred provider organization. Prior to April 26, 2002, Petitioner's physician detected a lump in Petitioner's right breast. Petitioner's physician ordered mammography and ultrasound examinations to be performed on Petitioner's right breast. Those examinations were performed on April 1, 2002. Following those tests, Petitioner's physician ordered an MRI examination of the right breast, which was performed on April 26, 2002, and is the procedure at issue in this proceeding. Following that MRI, Petitioner had another mammography and ultrasound for the diagnosis and treatment of breast cancer. Respondent has paid Petitioner's claims for coverage of the mammography and ultrasound examinations. Respondent has denied payment for the professional fee associated with the MRI in the amount of $215.00. Respondent has paid the facility fee associated with the MRI in the amount of $1,705.00. Respondent asserts that the payment of that fee was in error and intends to seek reimbursement for that payment if it prevails in this proceeding. The terms of coverage of the state group health insurance plan are set forth in a document entitled "State Employees' PPO Plan Group Health Insurance Plan Booklet and Benefit Document" (Benefit Document). The Benefit Document (at page 31, paragraph 47 of the section entitled "Services Not Covered By The Plan") specifically excludes the following from coverage: 47. Services and procedures considered by BCBSF to be experimental or investigational, or services and procedures not in accordance with generally accepted professional medical standards, including complications resulting from these non-covered services. The Benefit Document has a section entitled "Definitions of Selected Terms Used By The Plan" beginning at page 49. The definition of the phrase "experimental or investigational services", found at page 51, includes, in pertinent part, the following: . . . any evaluation, treatment, therapy, or device that: * * * is generally regarded by experts as requiring more study to determine maximum dosage, toxicity, safety or efficacy, or to determine the efficacy compared to standard treatment for the condition has not been proven safe and effective for treatment of the condition based on the most recently published medical literature of the U.S., Canada or Great Britain using generally accepted scientific, medical or public health methodologies or statistical practices is not accepted in consensus by practicing doctors as safe and effective for the condition is not regularly used by practicing doctors to treat patients with the same or a similar condition The Benefit Document provides at page 51 that BCBSF and the Division of State Group Insurance determine whether a service is experimental or investigational. The testimony of Dr. Wood established that an MRI of the breast is experimental or investigational within the meaning of the Benefit Document. 2/ MRI examinations of the breast are not reliable diagnostic tools because such examinations result in an unacceptable number of cases where an MRI produces false negative findings that reflect the absence of cancer where cancer is, in fact, present in the breast. According to Dr. Wood, an MRI cannot be relied upon and should not be used to avoid a biopsy of a suspicious mass because a patient would run an unacceptable risk that the detection of cancer may be delayed or missed. Dr. Wood also testified that radiologists in Florida performing services for the state group insurance health plan have been informed of BCBSF's position. Petitioner's doctors did not inform her prior to the examination that the MRI examination would not be covered by her insurance plan.
Recommendation Based on the foregoing, it is RECOMMENDED that Respondent enter a final order denying coverage for the MRI claims submitted by Petitioner. DONE AND ENTERED this 17th day of February, 2003, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of February, 2003.
The Issue The issues for determination in this case are: 1) whether Respondent failed to provide Petitioner proper notice of continuation health care coverage under the Florida Employees Group Insurance Program; and, 2) whether Petitioner is entitled to reimbursement for medical expenses incurred subsequent to termination of his employment.
Findings Of Fact Petitioner, EDWARD HERNANDEZ, is a former employee of the University of South Florida (USF) in Tampa, Florida. Respondent, DIVISION OF STATE EMPLOYEES INSURANCE, is the agency of the State of Florida responsible for the administration of the Florida Employees Group Insurance Program. On July 7, 1994, Petitioner was terminated from his employment as a library technical assistant with the University of South Florida in Tampa, Florida. Petitioner's employment termination resulted from a poor performance appraisal, and did not result from gross misconduct. While employed with the University of South Florida, Petitioner participated in the Florida Employees Group Insurance Program, which participation included individual health care coverage provided by a Health Maintenance Organization (HMO). As an employee, Petitioner's contribution to the cost of such individual health care coverage was $26.02 per month which was automatically deducted from his compensation by his employer. As an employment benefit, Petitioner's employer, the University of South Florida, was responsible for, and paid the remaining cost associated with Petitioner’s health care coverage. On July 27, 1994, Respondent DIVISION OF STATE EMPLOYEES INSURANCE, received notification of Petitioner's termination of employment from USF. On August 10, 1994, Respondent initially mailed a notice to Petitioner informing him of his eligibility for continuation coverage. The initial notice of continuing coverage was mailed to Petitioner at PO Box 17803, Tampa, Florida, 33682, which at that time was the address listed for Petitioner in the Employees Group Insurance Program system. In April of 1994, however, Petitioner had relocated, and Petitioner's mailing address in August of 1994 was 12741 North 17th Street. Petitioner had informed the University of South Florida as to his change of address; however, for reasons unknown, Petitioner's change of address was not entered into the Employees Group Insurance Program system. Petitioner, accordingly, did not receive the initial notice of continuation coverage mailed by Respondent on August 10, 1994, nor was the initial notice returned to Respondent. Almost eighteen months later, on March 11, 1996, Respondent received a letter of inquiry from Petitioner dated March 8, 1996, stating that Petitioner had significant medical needs and was awaiting notification from Respondent of his eligibility for continuing coverage. Respondent's staff reviewed Petitioner's letter dated March 8, 1996 to determine whether receipt of the initial notice of continuation coverage could be verified. Because Respondent's 1994 records had already been archived, there was a question at that time regarding verification that the initial notice of continuation coverage had been properly mailed to Petitioner. Accordingly, on June 6, 1996, Respondent in good faith mailed a second notice of continuation coverage to Petitioner which provided for retroactivity back to the date of Petitioner's termination of employment. Petitioner received the second notice of continuation coverage. The second notice of continuation coverage stated that Petitioner was eligible for individual continued coverage for the eighteen consecutive months after termination of his employment with USF. The notice stated that the group coverage in effect for Petitioner at the time of his termination was a Health Maintenance Organization (HMO). The notice specifically stated in bold print that the cost of the premium for individual continuation coverage was $162.61 per month. This amount represents the cost of the premium of $158 plus a two percent (2%) administrative fee. This amount does not exceed 102% of the applicable premium cost for such period. The notice further stated that the application and premium must be postmarked no later than August 6, 1996. Under the terms of the notice of continuation coverage, if implemented, Petitioner's continuation coverage would begin on September 1, 1994, and would be reinstated for the eligibility period of eighteen consecutive months from that date. On June 16, 1996, Petitioner executed the application for continuation coverage, and enclosed a premium payment in the amount of $26.02, which represented Petitioner's cost for coverage while employed with the University of South Florida. Petitioner also enclosed a letter dated June 22, 1996, stating his position to Respondent regarding the retroactivity of coverage and the basis for his contention that he should not be required to pay a premium in excess of his cost prior to termination of employment. Petitioner further requested reimbursement from Respondent in the amount of $272.27 for medical expenses incurred by Petitioner during the period between termination and receipt of the second notice of continuation coverage. Respondent received Petitioner's application, payment and letter on June 25, 1996. On July 10, 1996, Respondent sent Petitioner a notice stating that Petitioner's premium payment would not be accepted, and further stating that " your letter has been forwarded to the Director's Office for further review, they will be corresponding with you on this matter shortly." On September 5, 1996, Petitioner filed a Petition for Declaratory Statement with Respondent which as indicated above, instituted these proceedings.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent enter a Final Order denying the petition. DONE and ORDERED this 25th day of February, 1997, in Tallahassee, Florida. RICHARD HIXSON Administrative Law Judge Division of Administrative Hearings DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 25th day of February, 1997. COPIES FURNISHED: Edward Hernandez, Esquire Post Office Box 173265 Tampa, Florida 32672-1265 Cindy Horne, Assistant General Counsel Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 A. J. McMullian, III, Director Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560
The Issue The issues are whether Petitioner, Daniel O. Cobb, is entitled to payment of claims for surgery performed on Ms. Cobb, Susan Catherine Cobb, his spouse, on November 11, 1985, and whether Respondent, the State, is estopped from denying coverage. A prehearing stipulation was filed limiting the facts, issues, exhibits and witnesses. The stipulated facts were incorporated into the Recommended Order and are in the Final Order as well. Petitioner presented the testimony of himself and his spouse. Petitioner's exhibits 2 through 6 were accepted into evidence. Exhibits 3 and 4 constituted hearsay. The Department presented the testimony of Hazel Rosser and Joseph F. Wellman. Four exhibits by the Department were offered into evidence and were accepted. Neither party ordered a transcript. Only the Department filed a proposed recommended order and findings of fact. The Findings of Fact and the Conclusions of Law in the Recommended Order are hereby adopted, except in Findings of Fact Nos. 16, 17, and 18, Mrs. Scott is changed to Mrs. Cobb and in Findings of Fact No. 18, Mr. Scott is changed to Mr. Cobb.
Findings Of Fact Daniel O. Cobb was an employee of the Florida Department of Transportation during 1985. Mr. Cobb and his spouse, Susan Cobb, had family coverage under the State of Florida Employees Group Health Self Insurance Plan (hereinafter referred to as the "State Plan"), until November 1, 1985. The State Plan is administered by Blue Cross/Blue Shield. Pursuant to the agreement between the State of Florida and Blue Cross/Blue Shield benefits which are payable under the State Plan are governed by a "Benefit Document." Each year, State employees are given an opportunity change the form of health insurance coverage they wish to have. During this "open enrollment period" an employee covered by the State Plan can elect to participate in a Health Maintenance Organization and an employee covered by a Health Maintenance Organization can elect to participate in the State Plan. During 1985, there was an open enrollment period between September 9, 1985, and September 20, 1985. During the 1985 open enrollment period State employees, including Mr. Cobb, were provided a Notice to Employees in which they were advised to carefully review information contained in a Benefit Comparison Brochure, a Rate Comparison Chart and a Health Care Plan Selection Form. These documents were provided to all State employees. The Selection Form instructed employees to "Please read the employee notice about HMO service areas and effective date of coverage before completing this section." State employees were also advised that any change in coverage would be effective November 1, 1985. On September 19, 1985, Mr. Cobb signed a State of Florida Employes Group Health Self Insurance Plan, Change of Information Form. Pursuant to this Change of Information Form, Mr. Cobb elected to terminate his health insurance coverage with the State Plan. On the Change of Information Form it was indicated that Mr. Cobb's election to terminate his coverage under the State Plan was to be effective November 1, 1985. Therefore, Mr. Cobb was informed and should have known that he was no longer eligible for medical cost payment for himself or his family pursuant to the State Plan after October 31, 1985. Mr. Cobb also signed a Member Enrollment (Group) and Physician Selection Form on September 19, 1985. Pursuant to this Form, Mr. Cobb enrolled himself, his Spouse and their children, in Health Options, Inc., a health maintenance organization. Mr. Cobb's participation in Health Options, Inc., began November 1, 1985. On September 19, 1985, Mr. Cobb was provided a list of Health Options, Inc., approved physicians which were available for use by Mr. Cobb and his family. Mr. Cobb designated Gerald A. Giurato, M.D., as his primary care physician on the Physician Enrollment Form which he signed on September 19, 1985. On October 28, 1985, Mr. Cobb was mailed a copy of the Health Options Member Handbook which, among other things, describes the grievance procedure to be followed when medical expenses were not paid by Health Options Inc., and the manner in which physicians were to be used in order to be entitled to payment, of their charges. The Handbook informed Mr. Cobb that all care had to be arranged through a primary care physician and that only services provided or approved by the primary care physician were covered. The Handbook also indicated that treatment by physicians who were not approved by the primary care physician would be the responsibility of the patient. During 1985 Mrs. Cobb was under the care of Alexander Rosin, M.D. Dr. Rosin performed surgery for the removal of a cyst on Mrs. Cobb, on November 11, 1985. Dr. Rosin was not a physician approved by Health Options, Inc., or Mr. Cobb's primary care physician. Nor was the surgery approved. Claims attributable to the November 11, 1985, surgery were submitted to the State Plan. Claims, for the charges of Dr. Rosin, Scott Blonder, M.D., and a Pathologist were submitted. The expenses for the November 11, 1985, surgery were incurred after coverage of Mr. and Mrs. Cobb under the State Plan ended. The type of surgery performed on Mrs. Cobb was also not authorized by the Benefit Document. No claims were submitted to Health Options, Inc., for medical expenses incurred for Mrs. Cobb's operation on November 11, 1985. None of the medical expense attributable to Mrs. Cobb's November 11, 1985, surgery were incurred with physicians or facilities approved by Health Options, Inc. By letter dated August 27, 1986, the Department denied the claims submitted to the State Plan attributable to Mrs. Cobb's November 11, 1985, surgery. Mr. Cobb filed a request for an administrative hearing to contest the Department's proposed denial.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is RECOMMEDED that a final order be issued by the Department denying payment of claimed expenses attributable to Mrs. Cobb's surgery of November 11, 1985. DONE and ENTERED this 15th day of July, 1988, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of July, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 864109 The Department has submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Department's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number, of Acceptance or Reason for Rejection 1 18. The letter denying payment was dated August 27, 1986, and not September 4, 1986. See DOA exhibit 1. 2 7. 3 Hereby accepted. 4 7. 5 3. 6 4 and 5. 7-9 6. 10-12 11. Summary of testimony and irrelevant. Summary of testimony argument. Concerning the weight to be given evidence and cumulative. 15 7. 16 Hearsay. 17-18 Conclusion of law. 19-20 16. 21 Not supported by the weight of the evidence. 22 15. COPIES FURNISHED: O. C. Beakes, Esquire Lindner Smith, Jr., Esquire 836 Riverside Avenue Jacksonville, Florida 32205 Andrea R. Bateman, Esquire Department of Administration Room 438, Carlton Building Tallahassee, Florida 32399-1550 Adis Vila, Secretary 435 Carlton Building Tallahassee, Florida 32399-1550 Augustus D. Aikens, Jr. General Counsel 435 Carlton Building Tallahassee, Florida 32399-1550 =================================================================
The Issue The issue is whether petitioners' request to terminate, without penalty, their participation in the state group health insurance plan should be granted.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Petitioners, Terri K. Cassano (Cassano) and Edward M. McDonald (McDonald), are employees of the Office of State Attorney, Tenth Judicial Circuit, in Bartow, Florida. As such, they are eligible to participate in the State Group Health Insurance Program (program) administered by respondent, Department of Administration, Division of State Employees' Insurance (Division). At issue in this case is approximately $1,500 paid by petitioners and their employer for health insurance coverage under the program during the period October through December 1989. Effective July 1, 1989 the State of Florida implemented the first phase of a two-phase Flexible Benefits Plan (plan) which allowed, among other things, for employees who participate in the program to make their required monthly insurance premium contribution through a salary reduction agreement which has the effect of reducing the employee's taxable income by the amount of such contribution. Although not made clear in the record, it may be inferred that the plan is embodied in Chapters 22FB-1, 2 and 3, Florida Administrative Code (1987), which rules became effective on August 3, 1989. In federal bureaucratic parlance, the plan is known as a ``cafeteria'' plan /1 and was implemented after approval was obtained from the Internal Revenue Service (IRS). All state employees were automatically enrolled in the plan unless they signed a waiver form. Cassano and McDonald chose to participate in the plan, and they acknowledge that they received a Division brochure describing the plan prior to their enrollment. Under the rules of the plan, a participant was required to remain in the plan for the entire plan year, which in this case ended on November 30, 1989, unless a so-called "qualifying status change" occurred. Rule 22BF-1.008(13) cites a number of events as constituting a "qualifying status change". However, the event defined in subparagraph (13)(b) as a "change in a participant's health insurance coverage resulting in cessation of coverage" is the event upon which petitioners rely. The manner in which that rule should be interpreted is the source of controversy in this proceeding. In July 1989 petitioners were utilizing as their health insurer Health Alliance Plan (HAP), a health maintenance organization (HMO) serving Polk County. HAP was designated as a qualifying HMO under the program. In late July petitioners learned that HAP would cease doing business in Polk County effective September 30, 1989. Because of this, it was necessary that they consider other insurance alternatives to replace their existing coverage. After considering enrollment in Blue Cross Blue Shield (BCBS), which was the only other health alternative offered by the Division,/2 Cassano decided to enroll as a dependent in her husband's health insurance program because of the lower monthly premiums and she would not have to meet a new deductible as she would with BCBS. As for McDonald, who is also a military retiree, he considered BCBS but opted instead for Medicare because he was being treated for an existing ailment and his physicians were not listed as primary providers with BCBS. Consequently, it would cost him approximately $200 per visit with those doctors if he elected to use BCBS. Under these circumstances, petitioners' health coverage under the program ended since their HMO was no longer in business and their only other option, BCBS, would result in petitioners paying significantly higher costs. Cassano was able to immediately obtain coverage with her husband's health plan effective on July 28, 1989 while McDonald's coverage with Medicare became effective on October 1, 1989, the day after his HAP coverage ended. When the Division learned that HAP was ceasing doing business in Polk County, it mailed to petitioners a "health care provider selection form" which offered them a special enrollment period from August 15 through 31, 1989. The form offered the choice of enrolling in HOPC, BCBS or to cancel their health insurance coverage. However, respondent contends that even though the form offered petitioners the option of cancelling their insurance, it did not apply and that petitioners' only choice was to transfer coverage to one of the two remaining state insurers. The form also noted that if petitioners had any questions they should contact their personnel office or the Division by telephone. Although their personnel office later informed them that respondent might not agree they could do so, Cassano and McDonald executed the form on August 23 and 28, 1989, respectively, and elected to cancel their coverage. They also executed a "qualifying status change form" so that they could cease participation in the plan even though the plan year did not end until November 30, 1989. In so doing, they noted on the form that the qualifying status change event was "cessation of coverage by Health Alliance Plan" and relied in part upon a Division document sent to them which outlined the plan and listed a qualifying status change event as being a "change in participant's health coverage: resulting in cessation of coverage". That same document noted that in order to prove that such an event had occurred, the employee had to furnish a "letter from carrier stating that coverage has ceased due to change in insurance plan". In addition, explanatory literature concerning the plan previously disseminated: by the Division reflected that "a cafeteria plan may also allow for revocation of health plan elections of all affected participants in the event coverage is significantly curtailed or completely terminated in connection with a health plan, if the coverage is provided by an independent third party." Thus, petitioners reasonably assumed that a qualifying status change had occurred by virtue of the cessation of coverage by HAP. After informal efforts to resolve the matter were unsuccessful, on September 28, 1989 Cassano and McDonald formally requested by letter the right to discontinue their participation, without penalty, in the state program. Their requests were essentially denied by letters dated October 5, 1989 from the Division director. In the proposed agency action, the Division stated that it would be happy to comply with their requests but "since the premiums you pay for such coverage have been pretaxed for the five month period ending December 1, 1989, we will continue to deduct these premiums through October 1989 payroll pursuant to rule 22FB-2.005 F.A.C." /3 As a consequence, petitioners were involuntarily required to pay for coverage in BCBS during the months of October through December 1989 even though they were enrolled in other health insurance plans, and their employer (the office of state attorney) was forced to make its required contribution. Through testimony of the state benefits administrator, William R. Seaton, it was established that the Division interprets the term "cessation of (insurance) coverage" as the cessation of all health insurance coverage by the state, including BCBS, an event unlikely to ever occur. Indeed, the administrator acknowledged that such an event would not occur unless the state no longer functioned as a viable entity. Because the state offered petitioners the option of enrolling in BCBS, Seaton contended there was no cessation of insurance coverage, even if petitioners' former HMO in Polk County went out of business. Seaton also opined that petitioners' request was prohibited by IRS regulations and, if approved, would subject the Division to a possible fine if audited by IRS. However, he could not identify a regulation that prohibited approval of their request. Further, there is no evidence that the Division has received specific advice from the IRS on the subject or made inquiry as to whether or not petitioners' request is permissible under federal regulations. Petitioners construe the termination of coverage by their HMO to be a qualifying status change since they no longer could be covered by that HMO. Relying on the plain language in the rule and Division explanatory literature, they did not telephone the Division to ascertain whether they could discontinue state coverage since they had no reason to do so. Through a proffer of agency counsel at hearing, it was pointed out that the federal regulation that allegedly prohibits petitioners from obtaining relief is found on page 14,847-6 of the Standard Federal Tax Reports published by Commerce Clearing House and received in evidence as a part of respondent's composite exhibit 1. 4/ It reads as follows: (2) Coverage changes. If the coverage under a health plan provided by an independent, third-party provider is significantly curtailed or ceases during a period of coverage, a cafeteria plan may permit all affected participants to revoke their election of the health plan and, in lieu thereof, to receive on a prospective basis coverage under another health plan with similar coverage.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the requests of Terri K. Cassano and Edward M. McDonald to discontinue participation in the state health program be granted and that appropriate refunds be given to petitioners and their employer. DONE and ORDERED this 9 day of February, 1990 in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9 day of February, 1990.
The Issue The issue is whether the MRI of Petitioner's cervical spine performed on April 8, 2009, was medically necessary and, therefore, covered under the state employee group health plan.
Findings Of Fact Petitioner Karina Velasquez ("Petitioner") is employed by the State of Florida. She has participated in the State of Florida Group Health Insurance Plan ("the Plan") since January 1, 2009, including on all dates that are relevant to this proceeding. Respondent Department of Management Services, Division of State Group Insurance ("Respondent") operates the Plan through a third party administrator, Blue Cross and Blue Shield of Florida, Inc. ("BCBSF"). On April 1, 2009, Petitioner, then 24 years old, was examined by Basil M. Yates, M.D., a board-certified neurologic surgeon. When Dr. Yates took Petitioner's medical history, he learned that Petitioner had fallen backward striking the back of her head in 2006. She did not lose consciousness and did not see a doctor. She had also been in a car accident in January 2003, but also did not see a doctor then because she did not have insurance. Around August of 2008, Petitioner began to have occipital cervical headaches (meaning, in the back of neck) and to experience dizziness. Thinking that her symptoms were related to her eyes, she had her eyes examined but they were normal. Petitioner occasionally swims and exercises four times a week at a gym. She jogs, lifts weights, and does aerobics. Dr. Yates' physical examination of Petitioner showed no major discomfort from palpitation of the paracervical musculature (muscles in the area of the cervical spine around the vertebrae) and greater occipital notches (base of the brain). Petitioner has one shoulder slightly higher than the other, but the physical examination was otherwise normal. Following the examination, Dr. Yates ordered a computed tomography ("CT") scan of Petitioner's brain and an magnetic resonance imaging ("MRI") of her cervical spine. The CT was ordered to rule out evidence of a prior contusion, hemorrhage, or tumor. The Plan covered the cost of the CT. Dr. Yates ordered an MRI to determine if there was damage to the cervical spine that could be causing muscle spasm or strain resulting from her fall. On April 8, 2009, Petitioner checked in for the MRI at the outpatient clinic at Baptist Hospital. She presented her driver's license and insurance card, and paid a $25 co-pay. Petitioner was later billed $5,174.31 by Baptist Hospital. BCBSF contracts with hospitals to provide services and requires pre-certification, or prior approval, for in-patient services but not for outpatient services. In December 2007, BCBSF mailed a letter to its participating physicians, including Dr. Yates, informing them that, effective January 21, 2008, Magellan Health Services/National Imaging Associates ("NIA") would be the vendor to determine medical necessity for advanced imaging procedures. The letter notes that a voluntary pre-service review process is available, although it is not binding upon BCBSF when it subsequently reviews a claim after a service has been provided. Dr. Yates did not know whether, in addition to the letter, any NIA guidelines were ever sent to his office. He does know that you need permission for "everything" and his staff "automatically" requests prior approval for procedures he orders. BCBSF sent NIA a form requesting a retrospective review of Dr. Yates' request for authorization for Petitioner's MRI. NIA received the form on April 17, 2009, and made the decision to deny coverage on April 22, 2009. The applicable NIA guidelines for cervical spine MRI are, in relevant part, as follows: AUTHORIZE:CHRONIC OR DEGENERATIVE CHANGES (i.e., osteoarthritis, degenerative disc disease) Chronic or degenerative changes with any of the following new neurological deficits: Extremity weakness; abnormal gait; asymmetric reflexes. (Document which neurological finding.) Chronic or degenerative changes with changing or new onset of radiculopathy or radiculitis (not radicular pain). Chronic or degenerative changes with new abnormal EMG or nerve conduction study. Chronic or degenerative changes with new extremity numbness or tingling AND trial of conservative treatment for at least six (6) weeks. Chronic or degenerative changes with new extremity numbness or tingling AND failed PT. Exacerbation of chronic back pain unresponsive to trial of conservative treatment, including PT/HEP (home exercise program), for at least six (6) weeks. Chronic or degenerative changes AND RECENT (<4 months) failed PT/HEP (home exercise program) See General Information for HEP requirements. * * * NEW ONSET OF NECK PAIN (Use this section ONLY if no other category is appropriate, check all other categories first.) New onset of neck pain with any of the following neurological deficits: extremity weakness; abnormal gait; asymmetric reflexes. (Document which neurological finding.) New onset of neck pain with radiculopathy or radiculitis (not radicular pain) with no improvement after trial of conservative treatment for at least six (6) weeks. New onset of neck pain with progression or worsening of symptoms during the course of conservative treatment. New onset of neck pain persisting with failed PT. On August 6, 2009, BCBSF denied Petitioner's first level appeal for payment. BCBSF reached its decision after Petitioner's medical records were reviewed by Alan Feren, M.D., a physician employed by NIA who is not licensed in Florida. Dr. Feren's work was reviewed by Constantine Morros, M.D. Dr. Morros is licensed in Florida and is board certified in radiology and nuclear medicine. He has worked for NIA as an independent contractor for eleven years, reviewing non-Florida physicians' recommendations to deny coverage for imaging services ordered by Florida physicians. Dr. Morros considered it important that Petitioner had neck and head headaches without motor or sensory abnormalities. There was no indication of muscle weakness or neurological findings. He noted that the cervical spine films showed degenerative changes, but Petitioner had no documented course of physical therapy or home exercise therapy. Under either category of the guidelines, new onset of neck pain or chronic or degenerative changes, Dr. Morros agreed with Dr. Feren that the MRI was not medically necessary and coverage should have been denied. The category that Dr. Morros relied on in reaching his decision was new onset of neck pain. If Dr. Morros had seen evidence of a four-to-six week trial of physician-assisted physical therapy or a home exercise plan, he would have approved the MRI. Dr. Morros did not have an opinion whether ordering the MRI for Petitioner was reasonable or necessary under the circumstances absent consideration of the guidelines. After the denial of the claim at the first level review by NIA for BCBSF, Respondent also denied Petitioner's second level appeal on September 24, 2009. Its decision was based on the findings of NIA and its conclusion that the MRI was not medically necessary. The terms of coverage of the Plan are set forth in the "State Employees' PPO Plan Group Health Insurance Plan Booklet and Benefits Document" ("the Benefits Document"). The Benefits Document provides that, as determined by BCBSF clinical staff and Respondent, services that are not medically necessary are excluded from coverage. The Benefits Document includes the following definition: Medically necessary . . . services required to identify or treat the illness, injury, condition, or mental and nervous disorder a doctor has diagnosed or reasonable suspects. The service must be: consistent with the symptom, diagnosis and treatment of the patient's condition; in accordance with standards of good medical practice; required for reasons other than convenience of the patient or the doctor; approved by the appropriate medical body or board for the illness or injury in question; and at the most appropriate level of medical supply, service, or care that can be safely provided. The fact that a service is prescribed by a doctor does not necessarily mean that the service is medically necessary. BCBSF and DSGI determine whether a service or supply is medically necessary. In addition to relying on the results of the NIA/BCBSF review, Respondent, at level two, relied, in part, on Dr. Yates' notes from his examination of Petitioner on April 1, 2009, as follows: Discussion: A scan of the brain and MRI of the cervical spine would be appropriate. This is most likely a[n] occipital headache from muscle sprain from the fal[l] back. It would be best benefited by a cervical, shoulder exercise program. (Emphasis added.) Because he suggested that the condition that most likely causing headaches could improve with exercise, Respondent takes the position that Dr. Yates should have prescribed a six- week trial of the cervical, shoulder exercise program before he decided to order an MRI. Dr. Yates however, who has fifty years of experience as a neurologic surgeon, believed that he might have been wrong and that the cervical spine could have been damaged when Petitioner fell. That condition could not have been helped by physical therapy and could only be determined by an MRI. It was Dr. Yates' opinion that the fact that Petitioner had been exercising regularly for several years indicated that physical therapy would not be effective. The point of physical therapy after one assumes that muscles have been damaged by an acute injury is to reactivate and stimulate the muscles, and to increase range of motion so that the muscles can be exercised. Dr. Yates initially determined that Petitioner was past the point of physical therapy. There is no evidence whether Dr. Feren or Dr. Morros knew about Petitioner's exercise routine and how that might have affected their opinions. The NIA Authorization Detail form supports Dr. Yates' decision to take into account Petitioner's exercise routine2 and contradicts the decisions of Dr. Feren and Dr. Morros. The following are questions and answers concerning medical necessity: MEDICAL NECESSITY EVALUATION QUESTION ANSWER Why is this study being ordered? Trauma/Injury Yes What was the date of initial onset? 3 years ago Has there been any treatment or conservative therapy? Yes What treatment or conservative therapy was given? Home therapy, medication What are the primary symptoms? HA/cervical pain Please provide additional clinical reasons for this study. None On May 5, 2009, Dr. Yates reviewed the results of the tests with Petitioner and her husband. The MRI was unremarkable other than showing mild degenerative changes with minimal bulges of three discs and tiny herniation of another disc. The brain scan was unremarkable. From this Dr. Yates concluded that the headaches are not caused by "an organic basis from the spinal cord, nerve roots, but are more related to muscular tension and inadequacy." He reported further that: The only correction for this is to strengthen the supra and parscapular and paracervical musculature. We have sent the patient to therapy for a month to get her some relief and teach her the exercises she should be doing. We gave the patient Naprosyn and Darvocet for discomfort. No other care or treatment should be required. To Dr. Yates, it was unusual to find degeneration of the cervical spine in a 24-year-old. Without the MRI, Dr. Yates would not have known of that condition or that Petitioner, although already exercising regularly, needed to be taught to the best exercises to strengthen muscles in her spine.
Recommendation Based on the foregoing, it is RECOMMENDED that Respondent enter a final order approving coverage for the MRI claim submitted by Petitioner. DONE AND ENTERED this 31st day of August, 2010, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 31st day of August, 2010.
The Issue The issue presented for decision in this case is whether the Department of Management Services properly denied medical insurance reimbursement to Marianne Fahle for EDTA chelation therapy services provided to her husband, John Fahle.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, and the entire record in this proceeding, the following findings of fact are made: Marianne Fahle is a retired employee of the State of Florida. At all times pertinent to this case, Marianne Fahle was a participant in the State of Florida group health insurance plan. Her husband, John Fahle, is a covered dependent. The state group insurance program is a self-insured health insurance plan administered for the State of Florida for its employees by Blue Cross Blue Shield of Florida ("BCBSF"). In August 2000, John Fahle was hospitalized after he collapsed at his home. Medical tests revealed that Mr. Fahle suffered from arteriosclerosis with an estimated 60-80% stenosis, or blockage, of his carotid artery. Rather than undergo surgery to relieve the blockage, Mr. Fahle chose a course of treatment commonly called EDTA chelation therapy. Chelation therapy involves the intravenous injection of ethylene-diamine-tetra acetic acid (edetic acid or EDTA) accompanied by nutritional supplements. After undergoing chelation therapy, Mr. Fahle's diagnostic tests were repeated, with reported results indicating some reduction of the blockage in his coronary artery and a reduction of the carotid artery blockage to 40-60 percent. The actual tests, as opposed to the physicians' reports of their results, were not offered as evidence. The weight of the evidence established that the reported improvement in Mr. Fahle's carotid artery blockage, from a 60-80 percent blockage to a 40-60 percent blockage, could be attributed to the subjectivity involved in reading the results of the diagnostic tests. In any event, the reported improvement was of little medical significance. Chelation therapy is generally accepted in the medical community as a safe and efficacious treatment for heavy metal toxicity, e.g., lead poisoning. The United States Food and Drug Administration ("FDA") approved EDTA as a lawfully marketed drug in 1953. The FDA cannot limit the manner in which a licensed physician may prescribe an approved drug, though it can place limits on the marketing representations that may be made as to the efficaciousness of a drug for certain uses. The FDA has approved the marketing of EDTA as a treatment for heavy metal poisoning. The FDA prohibits any person from representing that chelation therapy is a safe and efficacious treatment for arteriosclerosis, though a physician may lawfully treat arteriosclerosis with chelation therapy. Petitioner submitted several articles attesting to the value of chelation therapy in treating arteriosclerosis. A significant minority of physicians in the United States employs chelation therapy as an option in the treatment of arteriosclerosis. However, reliable, formal clinical trials have yet to establish the efficacy of chelation therapy as a standard treatment for arteriosclerosis. The strength of the anecdotal evidence and the persistent advocacy of physicians have led the National Institute of Health to begin clinical trials on the use of chelation therapy in the treatment of arteriosclerosis, but the results of these trials will not be available for five years. In any event, Mr. Fahle's coverage is determined by the terms of Ms. Fahle's insurance policy. The terms of coverage for the state group health insurance plan are set forth in a document titled, "State Employees' PPO Plan Group Health Insurance Plan Booklet and Benefit Document." The benefit document states, in pertinent part: Services Not Covered By The Plan The following services and supplies are excluded from coverage under this health insurance plan unless a specific exception is noted. Exceptions may be subject to certain coverage limitations. * * * 47. Services and procedures considered by BCBSF to be experimental or investigational, or services and procedures not in accordance with generally accepted professional medical standards, including complications resulting from these non-covered services. The benefit document defines "experimental or investigational services" as follows: ny evaluation, treatment, therapy or device that: cannot be lawfully marketed without approval of the US Food and Drug Administration or the Florida Department of Health if approval for marketing has not been given at the time the service has been provided to the covered person is the subject of ongoing Phase I or II clinical investigation, or the experimental or research arm of Phase III clinical investigation-- or is under study to determine the maximum dosage, toxicity, safety or efficacy, or to determine the efficacy compared to standard treatment for the condition is generally regarded by experts as requiring more study to determine maximum dosage, toxicity, safety or efficacy, or to determine the efficacy compared to standard treatment for the condition has not been proven safe and effective for treatment of the condition based on the most recently published medical literature of the US, Canada or Great Britain using generally accepted scientific, medical or public health methodologies or statistical practices is not accepted in consensus by practicing doctors as safe and effective for the condition is not regularly used by practicing doctors to treat patients with the same or similar condition BCBSF and [the Department] determine whether a service or supply is experimental or investigational. The benefit document is not explicit as to whether the elements of the quoted definition are to be considered in the disjunctive, but the plain sense of the document leads to the reading that if any one of the definitional elements applies, then the service or supply must be considered experimental or investigational. Dr. William Wood, BCBSF's medical director, confirmed that if any single element of the definition applies to a service or supply, then it is considered experimental or investigational. Chelation therapy would fall under every element of the definition except, arguably, the last element dealing with regular use by practicing physicians. The FDA does not allow chelation therapy to be marketed as a treatment for arteriosclerosis, chelation therapy is currently the subject of clinical trials, and it is not accepted "in consensus" by practicing physicians as a treatment for arteriosclerosis.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Management Services enter a Final Order dismissing the petition of Marianne Fahle. DONE AND ENTERED this 2nd day of December, 2002, in Tallahassee, Leon County, Florida. LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of December, 2002. COPIES FURNISHED: Marianne Fahle 12205 North Marjory Avenue Tampa, Florida 33612 Julia Forrester, Esquire Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 John Matthews, Director Division of State Group Insurance Department of Management Services 4040 Esplanade Way, Suite 135 Tallahassee, Florida 32399-0950 Simone Marstiller, General Counsel Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950
Findings Of Fact Introduction Petitioner, New Riviera Health Resort, Inc. (New Riviera or petitioner), operates a fifty-two bed nursing home at 6901 Yumuri Street, Coral Gables, Florida. The facility is licensed by respondent, Department of Health and Rehabilitative Services (HRS). At all times relevant hereto, New Riviera was a participant in the Florida Medicaid Program. Respondent is designated as the state agency responsible for the administration of Medicaid funds under Title XIX of the Social Security Act. In this regard, HRS requires providers such as New Riviera to follow cost reimbursement principles adopted by the federal government. These principles, rules and regulations are codified in publications known as HIM-15 and the Cost Provider Reimbursement Manual. Pursuant to Rule 10C-7.48(4)(a)5.a., Florida Administrative Code, petitioner filed a cost report for its fiscal year ending November 30, 1983, reflecting what it perceived to be its reimburseable costs for providing Medicaid services during the fiscal year. The cost report was audited by HRS field auditors in 1984. Thereafter, on March 20, 1985, HRS issued a Schedule of Audit Adjustments, Statement of Costs, and Statement of Cost and Statistics. As is pertinent here, the Schedule of Audit Adjustments recommended that reimburseable costs be reduced by $71,561.00 in order to bring the cost report in conformity with Federal and State Medicaid reimbursement principles.1 These adjustments relate to the owner's salary and fringe benefits ($50,246), certain roof repairs ($11,613.00), a pension plan contribution ($6,000), and the write-off of certain assets ($3,772). Prior to the preparation of the above reports, an exit conference was held by HRS representatives and petitioner to discuss the proposed adjustments. When no resolution was reached, the reports were issued. That precipitated the instant proceeding. Owner's Salary & Benefits ($50,246.00) Petitioner's facility is owned by Shirley El. St. Clair. Using an HRS formula, New Riviera allocated $30,934.00 of her total salary during the fiscal year to the cost report for reimbursement. It also sought to be reimbursed for $2,312.00 in related payroll taxes, and $17,000.00 for pension plan contributions. All were disallowed by HRS on the ground the costs were "unnecessary" under applicable federal regulations. Specifically, Section 902.2 of HIM-15 provides in part that compensation paid to an owner may be included in allowable provider cost "only to the extent that it represents reasonable renumeration for managerial, administrative, professional, and other services related to the operation of the facility and rendered in connection with patient care." The regulation goes on to provide that "services rendered in connection with patient care include both direct and indirect activities in the provision and supervision of patient care." The same section prohibits reimbursement where services rendered are not related to either direct or indirect patient care but are, for example, rendered "for the purpose of managing or improving the owner's financial investment." The agency takes the position that Ms. St. Clair's efforts are focused in the direction of managing and improving her investment, and that her salary and benefits should be accordingly disallowed. It also contends that the facility had three licensed administrators during fiscal year 1983, and that New Riviera does not need that number to adequately operate a 52- bed facility, which is small by industry standards. St. Clair has been owner-president-administrator of the facility since its inception some thirty two years ago. In response to an audit inquiry, St. Clair gave the following description of her duties: . . . in general terms. I am the Chief Executive Officer of the Corporation and Trustee of the New Riviera Pension Trust. Though I no longer keep regular business hours in the traditional sense, I generally work a 30-50 hour week depending on circumstances, frequently on weekends. Much of my time is spent managing the financial aspect of New Riviera and the Pension Plan. I do most of the banking and a great deal of the grocery and "odds and ends" shopping for New Riviera. At final hearing she described her working hours in 1983 as being "irregular"; but still totaling 30 to 50 hours per week. Her duties included "a bit of everything," including keeping the books, admitting patients, performing marketing and banking activities, and relieving other personnel on weekends. There is no dispute that St. Clair has a voice in all business decisions of the nursing home. Because there are no secretaries or receptionists employed by the facility, she also performed various secretarial tasks. During the fiscal year in question, St. Clair also had two other licensed and full-time individuals performing administrative duties. One was a Mrs. Campbell whose primary duty was to keep the books while the other was her son, Michael, who acted as assistant administrator. According to St. Clair, Michael has a masters -degree in health care administration, supervised the maintenance of the facility, and was there "just to learn the business" in anticipation of her retirement. He recently left New Riviera in September, 1985 and had not been replaced as of the time of final hearing. Mrs. Campbell still remains on the payroll. HRS has allowed Campbell's and Michael's salary and fringe benefits but has proposed to disallow all salary and fringe benefits of Mrs. St. Clair. In this regard, there is no credible evidence that a 52-bed facility requires three licensed administrators. Indeed, a 52-bed facility is unique in terms of size, and is roughly one-half the size of a typical nursing facility. Mrs. St. Clair did perform numerous administrative duties during the fiscal year in question, and without contradiction, it was established she devoted some 30 to 50 hours per week at the facility. On the other hand, her son was simply "learning the trade," and his sole function was described as "supervising the maintenance." Under these circumstances, it is found that Shirley St. Clair's salary and fringes are related to "services rendered in connection with patient care" and should be reimbursed. Conversely, the son's salary and fringe benefits were not necessary, were duplicative in nature, and should be disallowed. This finding is substantiated by the fact that the son has not been replaced since leaving the facility. Reimburseable expenses should be accordingly adjusted. Roof Repairs ($11,613.00) During the fiscal year, repairs costing $11,613.00 were made to a part of the roof structure due to leaks. The facility's accountant recorded these repairs as an expense on the cost report. This accounting treatment was made, according to the provider, on the theory the repairs did not extend the useful life of the building, and were necessary for continued operation of the facility. Section 108.2 of HIM-15 in controlling and provides in part as follows: Betterments and improvements extend the life or increase the productivity of an asset as opposed to repairs and maintenance which either restore the asset to, or maintain it at, its normal or expected service life. Repair and maintenance costs are always allowed in the current accounting period. The more credible and persuasive evidence of witness Donaldson supports a finding that the roof expenditure was a "betterment and improvement" that extended the life of the roof (asset). In view of this, it is found that the cost of the repair should have been capitalized, rather than expensed, and that reimburseable costs should be reduced by $11,613 as proposed by the agency. Pension Plan Contribution ($6,000.00) Petitioner reflected $51,000.00 on its cost report for contributions to its employee pension plan during the fiscal year. This included separate payments of $10,000.00, $35,000.00 and $6,000.00 made in April and May, 1983 and January, 1984, respectively. This information is contained on Schedule B of the firm's Form 5500-R filed with the Internal Revenue Service on September 7, 1984. During the course of its audit, HRS requested the pension plan consultant to furnish information concerning minimum funding standards and retirement benefits for the participants. This was required to verify the charges on the cost report. In a letter dated July 3, 1984, the consultant advised in pertinent part: Based on salary and financial information provided by New Riviera, a $45,000.00 contribution to the pension plan met the minimum funding standards and was deductible. Relying upon this information, HRS disallowed $6,000.00 of the $51,000.00 in total costs allocated for the plan during the year ended November 30, 1983. On January 19, 1984, New Riviera issued a check in the amount of $26,000.00 payable to Shearson American Express for a pension plan contribution. Of that total, $6,000.00 was a contribution to 1983 costs. According to New Riviera's accountant, the additional $6,000.00 was required by the plan's actuary. However, this was not confirmed by any documentation or testimony from the actuary. When the audit was being conducted by HRS in the summer of 1984, the check written to Shearson American Express was in its business records, but was not produced for the auditors' inspection. Further, it was not produced at the exit conference held at a later date. In this regard, it was petitioner's responsibility to furnish that information during the course of the audit and exit conference rather than assuming that the auditors would discover the document while reviewing the auditee's books and records. This is particularly true since petitioner was placed on notice that the $6,000.00 was in dispute and subject to being disallowed by the agency.2 Even if the check had been disclosed to the auditors, it does not change the character of the $6,000 payment. The check was issued during the fiscal year ending November 30, 1984 and was therefore outside the scope of the audit year in question. If it is an appropriate expenditure, it is reimburseable on the 1984 cost report rather than the cost report for the year ending November 30, 1983. Therefore, 1983 reimburseable costs should be reduced by $6,000, as proposed by the agency. Write-off of Certain Assets ($3,772.00) During fiscal year 1983 petitioner wrote off $3,722.00 in remaining balances related to certain equipment.3 This amount related to the remaining or salvage value of certain assets whose useful lives had expired according to depreciation guidelines, but which assets were still in service. Even though the assets had not been retired or sold, petitioner wrote off the undepreciated balances remaining on the books. The undepreciated balances arose by virtue of petitioner using the declining balance method of depreciation. Under Medicaid guidelines, assets acquired after 1966 must be depreciated by the straight line method. Therefore, petitioner was in error in using a declining balance method. Even so, according to generally accepted accounting procedures, it was incorrect to write-off a remaining balance related to certain assets before the assets were actually sold or retired. At hearing petitioner agreed that its accounting treatment was contrary to HRS requirements, and accordingly these costs ($3,772.00) should be disallowed.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that petitioner's cost report for fiscal year ending November 30, 1983 be adjusted in accordance with paragraphs 4 through 7 of the Conclusions of Law portion of this Recommended Order. DONE and ORDERED this 13th day of January, 1986, in Tallahassee, Florida. DONALD R. ALEXANDER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of January, 1986.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Respondent, the Department of Administration, enter a final order denying coverage for the orthodontia recommended for Sandra Walsh. RECOMMENDED this 18th day of March, 1988, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of March, 1988.
The Issue Whether Petitioner is entitled to receive a refund of insurance premiums paid to Respondent.
Findings Of Fact The Division administers health plans, including COBRA, for the benefit of employees of the State of Florida. Petitioner was an employee of the State of Florida from 1991 until February 11, 2000, which was his last day on the payroll of the Office of the Attorney General. On May 27, 1998, Petitioner was placed on the Temporary Disability Retired List by the U. S. Air Force. He was presented an identification card reflecting his rank as colonel. His identification card reflects that he was eligible for medical insurance. As a retired military person Petitioner was eligible for treatment at a military medical facility or through TRICARE. TRICARE is a comprehensive health insurance program for military personnel. TRICARE may be a primary provider or a secondary provider of health benefits. During his active employment with the state, however, the TRICARE coverage was secondary. This means that the state paid any claims to the extent of its policy limits and the remaining amount of any claim would be processed and paid in accordance with TRICARE coverage. Petitioner was aware that placement on the Temporary Disability Retired List was, as the name implied, a temporary situation. It was his expectation that subsequent to being placed on the list, the U. S. Air Force would determine either that he was disabled to the extent that he would receive disability retirement, and thus continue to be eligible for TRICARE, or that he would be denied disability retirement and would have to arrange for other medical insurance, or do without. During Petitioner's employment with the Florida Department of Legal Affairs, he was covered by the State Group Health Self Insurance Plan. On February 11, 2000, when Petitioner terminated his employment with the Florida Department of Legal Affairs, he was seeking to have the State of Florida declare him disabled. Pursuant to law, Petitioner's entitlement to the benefits of the State Group Health Self Insurance Plan continued until March 31, 2001. Without taking action to secure health insurance, Petitioner would have only TRICARE as an insurer. However, if the state determined him to have become disabled while employed by the state, he would be covered by the State Group Health Self Insurance Plan, retroactively. On May 11, 2000, the Florida Division of Retirement denied Petitioner's application for in-line-of-duty disability retirement benefits. The effect of this determination was to terminate the possibility of coverage under the State Group Health Self Insurance Plan with the reduced premiums available to a person on disability retirement. The Florida Department of Legal Affairs failed to immediately notify the Division that Petitioner had terminated his employment. As a result, the Division did not send Petitioner a Notice of Continuation Coverage Eligibility until immediately after to May 11, 2000. The notice informed Petitioner of his right to have family continuation coverage in return for a premium of $517.96. It further informed him that he had until July 11, 2000, to elect coverage which would be retroactive to April 1, 2000. A second Notice of Continuation Coverage Eligibility, dated May 22, 2000, was sent to Petitioner. This notice similarly informed Petitioner of his right to have family continuation coverage in return for a premium of $517.96 but informed him that he had until July 22, 2000, to elect coverage which would be retroactive to April 1, 2000. The second page of the Notice of Continuation Coverage Eligibility informed Petitioner, inter alia, that coverage would be available for 18 months for voluntary or involuntary termination, 29 months for certain disabled qualified beneficiaries, and 36 months for all other qualifying events. The second page also informed Petitioner that coverage might end on the occurrence of several events. The event asserted to be pertinent to this case is the date the insured becomes covered by another group health plan which does not contain any limitation or exclusion with respect to a pre- existing condition. Petitioner filed a "Continuation of Coverage Enrollment" form dated July 21, 2000. This form noted that the date of the event that precipitated eligibility for coverage was February 11, 2000. Petitioner wrote on the form in his own hand, "I am permanently and totally disabled; I and my dependents am covered under TRICARE at present." At the bottom of the "Continuation of Coverage Enrollment" form, the Division authorized coverage dating back to April 1, 2000. Petitioner sent the Division a check in the amount of $517.96 to cover the initial premium. The date on the check was July 21, 2000. Sometime prior to August 24, 2000, he sent the Division another premium payment in the amount of $517.96. At the time Petitioner filed the "Continuation of Coverage Enrollment" form and submitted the premiums, he was covered by the regular military medical system, because he was considered to be retired by the U.S. Air Force. However, since the question of his disability with the U.S. Air Force had not been decided, he was aware of the possibility that his military health coverage could end at any time. By maintaining a COBRA policy, he was insuring that he would not find himself in a posture where he had neither COBRA nor TRICARE. On August 16, 2000, the U.S. Air Force determined that Petitioner was disabled and was entitled to the medical care provided by law for retired service persons, which includes TRICARE, presumably, for life. It was at this point Petitioner demanded the return of the premium he paid. Petitioner's theory for the refund is that he was, under the law, ineligible for COBRA coverage during the two months that he paid a premium with respect to it. On September 29, 2000, in a letter signed by Ria Brown, Benefits Administrator, the Division reiterated its refusal to refund the premiums and noted that Petitioner was covered under COBRA for the period April 1, 2000, through May 31, 2000. The letter informed Petitioner that, "Based on the information in your letter, you are eligible and entitled for TRICARE Standard coverage, but you did not indicate that you are actually enrolled." Ms. Brown also advised the following: Coverage at time of COBRA event: Section 4980(f)(2)(B)(iv) provides that a qualified beneficiary's right to COBRA continuation coverage may be terminated when the qualified beneficiary "first becomes," after the date of the COBRA election, covered under another group health plan (subject to certain additional conditions) or entitled to Medicare benefits. The final regulations provide that an employer may cut off the right to COBRA continuation coverage based upon other group health plan coverage or entitlement to Medicare benefits only if the qualified beneficiary first becomes covered under the other group health plan coverage or entitled to the Medicare benefits after the date of the COBRA election. Petitioner asserted in a reply, also dated September 29, 2000, that contrary to Ms. Brown's assertion, he was actually enrolled in TRICARE Standard during the operative period. In a letter dated October 3, 2000, Merrill Moody, the Division Director, informed Petitioner that his claim for refund was being denied because he had a contractual relationship with the Division and that he got the product for which he paid-- health insurance coverage for April and May, 2000. Mr. Moody also pointed out that the Division was required under law to allow active employees and their covered dependents, to participate in COBRA, notwithstanding their participation in other programs.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Division of State Group Insurance enter a final order denying Petitioner's request for a refund of $1035.92. DONE AND ENTERED this 19th day of March, 2001, in Tallahassee, Leon County, Florida. HARRY L. HOOPER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 19th day of March, 2001. COPIES FURNISHED: Julia Forrester, Esquire Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 Morris Shelkofsky 3721 Crawfordville Road, No. 17 Tallahassee, Florida 32310-7074 Cynthia Henderson, Secretary Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 Bruce Hoffmann, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
